1. M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Working Group for Chapter 28 – Consumer and Health Protection Bilateral screening: Chapter 28 PRESENTATION OF MONTENEGRO Brussels, 15-16 April 2013

2. Chapter 28: Consumer and Health Protection Directive 2011/83/EU of the European Parliament and of the Council of 25 October 2011 on consumer rights, amending Council Directive 93/13/EEC and Directive 1999/44/EC of the European Parliament and of the Council and repealing Council Directive 85/577/EEC and Directive 97/7/EC of the European Parliament and of the Council Text with EEA relevance Zvezdan Čađenović Montenegrin Union of Employees zcadjenovic@yahoo.com M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 28: CONSUMER AND HEALTH PROTECTION

3. Chapter 28: Consumer Protection and Public Health M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Contents Chapter 28: CONSUMER AND HEALTH PROTECTION  Relevant acquis  National implementing legislation  Institutional Framework  Level of transposition (key rules)  Enforcement  Future activities

4. Chapter 28: Consumer Protection and Public Health M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Relevant acquis  Directive 97/7/EC of the European Parliament and of the Council of 20 May 1997 on the protection of consumers in respect of distance contracts, repealed by  Directive 2011/83/EU of the European Parliament and of the Council of 25 October 2011 on consumer rights Chapter 28: CONSUMER AND HEALTH PROTECTION

5. M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union  The LCP was adopted by Parliament of MNE in May 2007  The Consumer Rights Directive (have not been subject of transposition measures with 2007 LCP): - adopted in October 2011, - to be transposed by national legislation (adopted and published) by 13 December 2013, - transposition measures to apply from 13 June 2014.  Directive 97/7/EEC (have been subject of transposition) Transposition measures Chapter 28: CONSUMER AND HEALTH PROTECTION Chapter 28: Consumer and Health Protection

6. Chapter 28: Consumer Protection and Public Health M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union National Legislation  Law on Consumer Protection, OG RMN No. 26/07, aims to ensure a uniform minimum protection of consumers in respect of B2C contracts concluded by means of distance communication;  Law on Internal Trade, OG RMN, No. 49/08, expands definition who can be cought under term „trader“, and provides for further compliance with Directive definition of „seller“;  Law on Obligations, OG MN No. 47/08, general contract law applicable in B2B, B2C, B2P, and P2P transactions. Chapter 28: CONSUMER AND HEALTH PROTECTION

7. Chapter 28: Consumer Protection and Public Health M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Institutional Framework  Beside MoE and Authority for Inspection Surveillance, other main institutions and stakeholders: -Courts, individual complaints, -Arbitration Board for Out-of-court Settlement of Consumer Disputes, ADR scheme for consumer protection Chapter 28: CONSUMER AND HEALTH PROTECTION

8. Chapter 28: Consumer Protection and Public Health M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Level of transposition (Key rules I) Level of transposition: High*  Definitions (Art. 2.[8, 11] LCP and Art. 6 LIT): -Consumer – one definition for whole LCP - natural person who buys, orders, accepts, uses goods or services, including public services, for non-business, namely non-professional purposes, or to whom the offer for a product or service is targeted; -Trader - one definition for whole LCP - a person who sells goods or provides services to consumers (no transposition of wording “in the course of his trade, business or profession”. - yet, Art. 6 of Law on Internal trade that expands definition who can be cought under term „trader“, Chapter 28: CONSUMER AND HEALTH PROTECTION

9. Chapter 28: Consumer Protection and Public Health M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Level of transposition (Key rules II)  Definitions (Art. 37 LCP): -Distance contract shall mean the contract negotiated and concluded through the means of distance communication within the sales network set up by the trader; -Operator of means of distance communication, not transposed (definitions is in sectoral legislation depending on means of distance communication – Law on Electronic Trade, Law on Electronic Communication, Law on Electronic Media/ provider of information society services, operators of public electronic communication networks, AVM service provider). Chapter 28: CONSUMER AND HEALTH PROTECTION

10. Chapter 28: Consumer Protection and Public Health M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Level of transposition (Key rules III)  Definitions (Art. 2.[19 and 16] LCP): -Means of Distance Communication shall mean any means of communication that enable conclusion of contracts between the consumer and the trader, without their immediate physical presence (catalogues, written material, press advertising with order form, telephone, facsimile machine, radio, television, electronic mail, and similar means) shall mean goods or service that may be circulated, including also public service; -Consumer contract shall mean a contract concluded with a consumer or consumer group. Chapter 28: CONSUMER AND HEALTH PROTECTION

11. Chapter 28: Consumer Protection and Public Health M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Level of transposition (Key rules IV)  General Scope: -LCP provides for specific provisions to protect the consumer in respect of contract negotiated and concluded through the means of distance communication within the sales network set up by the trader (Art. 37 LCP) Chapter 28: CONSUMER AND HEALTH PROTECTION

12. M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 28: CONSUMER AND HEALTH PROTECTION DirectiveLCP financial services (non-exhaustive list in Annex II) X Automatic vending machines (automated commercial premises) √ (no “a.c. premises”) Public phones√ Construction or sale of immovable property √ (no “other immovable property rights”) auction√ Art. 3(2) (c) (ii)Partially (no “regular rounds man”) accommodation, transport, catering or leisure services √ Chapter 28: Consumer and Health Protection Level of transposition (Key rules V) Exemptions provided in Directive (Art. 47 LCP)

13. Chapter 28: Consumer Protection and Public Health M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Level of transposition (Key rules VI)  General principles: -A consumer may not waive the right set out in this Law.; -In the case of any conflicts in respect of the interpretation of any provision of this Law, such provisions shall be interpreted in favour of the consumers.; -Burden of proof - In the case of any disputes about the consumer’s eligibility to exercise the rights set out in this Law pertaining to meeting of a deadline to exercise the right, it shall be deemed that the consumer is eligible in this respect. Chapter 28: CONSUMER AND HEALTH PROTECTION CP Instruments (General Principles) (Art. 5 LCP)

14. M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 28: CONSUMER AND HEALTH PROTECTION DirectiveLCP Pre-contractual information (Art. 4 (1), (a) to (i) √ “In good time”X Art. 4 (2)Partially (no “clear” and “in good faith”) Telephone communication Art. 4(3)Partially (“purpose” instead of “commercial purpose”) Extensions - After-sale services; guarantee accompanying the product; requirements for termination of the contract concluded for an open-ending period or for a period exceeding a year. Chapter 28: Consumer and Health Protection Level of transposition (Key rules VII) CP Instruments (Information duties) (Art. 39 LCP)

15. M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 28: CONSUMER AND HEALTH PROTECTION DirectiveLCP Written confirmation (Art. 5 (1) Directive) √ (no “ durable medium”) “time of written confirmation”√ (“before concluding the contract”) “information to be provided in any event” Partially (“name and address” instead of “geographical address”) Exception for services performed by use of means of d.c. (Art. 5(2)) X Extension - After-sale services, guarantee accompanying the product, requirements for termination of the contract concluded for an open-ending period or for a period exceeding a year. Chapter 28: Consumer and Health Protection Level of transposition (Key rules VIII) CP Instruments (Written confirmation ) (Art. 40 LCP)

16. Chapter 28: Consumer Protection and Public Health M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Level of transposition (Key rules IX)  Prolongation of rescission period (Art. 41(2) and (3) LCP): -consumer can unilaterally terminate the contract within three months following the receipt of goods, or, for the services, following the contract conclusion date, if the trader does not meet written confirmation duty; -7 working days if the trader meet writen confirmation duty within three months following the day on which the consumer received the goods, or, for the services, following the contract conclusion data.  Misdemeanor (Art. 129(1)[14 and 15] and (2) LCP): pecuniary fine for offence imposed on a trader, as well as separate one on the responsible person if the trader is legal entity. Chapter 28: CONSUMER AND HEALTH PROTECTION CP Instruments (sanctions for breach of Information duties (written confirmation))

17. M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 28: CONSUMER AND HEALTH PROTECTION DirectiveLCP At least 7 working days√ Prolongation of rescission period√ Effects of rescission√ (no penalty; reimbursement of sums paid free of charge within 30 days (no “as soon as possible”); 30 days for consumer to return the goods, costs of the return born by consumer) Cancelation of credit agreement√ Extension – postal rule/dispatching rule; - always to be sent in written form. - contract rescind at the time when the trader receives the notification Chapter 28: Consumer and Health Protection Level of transposition (Key rules X) CP Instruments (Right, manner and effects of rescission (withdrawal)) (Art. 41, 43, 44 and 45 LCP)

18. M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 28: CONSUMER AND HEALTH PROTECTION DirectiveLCP Start of provision of services before 7 w/d √ Goods and service dependant on fluctuation in fin. markets √ Consumer specification made goods√ Audio/video recordings and software √ Newspapers, magazines√ Games of chance√ Chapter 28: Consumer and Health Protection Level of transposition (Key rules XI) Exemptions to the right of rescission (Art. 42 LCP )

19. M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 28: CONSUMER AND HEALTH PROTECTION DirectiveLCP No obligations for consumer under the rescinded contract √ (stating no reasons and no penalty (“damages”: costs, interests, penalty, and like), except the costs to return the goods. the legal effects of renunciation governed by national laws √ reimbursement of payments for goods or services provided √ refund to consumer of price paid within 30 days following the receipt of written notification) return of goods received√ (return to trader goods within 30 days following the forwarding of the notification) Chapter 28: Consumer and Health Protection Level of transposition (Key rules XII) CP Instruments (Effects of rescission (withdrawal)) (Art. 44, 45, and 46 LCP)

20. M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Chapter 28: CONSUMER AND HEALTH PROTECTION DirectiveLCP Performance (execution of order) Art. 7 (1) Directive Partial (“30 days from contract conclusion” instead of “30 days from consumer order”) Performance (information and refund if unavailable within 30 days) Art. 7 (2) Directive Partial (no “information requirement”; “impossibility to execute the contract” instead of “unavailability of goods and services“) Payment by cardX Inertia sellingPartial (defined as aggressive practice, while no adequate consumer protection in cases of unsolicited supply) Extension – option for consumer to extend deadline for trader performance; Chapter 28: Consumer and Health Protection Level of transposition (Key rules XIII) Performance, Payment by card, Inertia selling (Art. 46 and 67 (5)[3] LCP)

21. Chapter 28: Consumer Protection and Public Health M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Enforcement I  Authority for Inspection supervision: -Authorised to issue orders toward traders in respect of consumer rights relating to wrong calculation of price (Art. 126(1) LCP) -Initiating misdemeanour procedure in case of infringement of the Law (Art. 129(1)[14 and 15] and (2) LCP) (fines from xxx to xxx) Chapter 28: CONSUMER AND HEALTH PROTECTION

22. Chapter 28: Consumer Protection and Public Health M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Enforcement II  Courts : -individiual complaints; -collective complaints: individual consumer, consumer organizations or other interested parties can submit a complaint with a competent court against individual trader, two or more traders involved in the same economic sector, or traders’ associations, in order to abate the provisions of the contract (pre-formulated contract terms) if these are waiving rights of the consumers in respect of distance sale (Art. 114 LCP).  Arbitration Board for Out-of-court Settlement of Consumer Disputes Chapter 28: CONSUMER AND HEALTH PROTECTION

23. Chapter 28: Consumer Protection and Public Health M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Future plans  ME in 3 rd and 4 th quarter 2010 executed detailed screening of 11 CP directives (including Directive 97/7/EC), supported by IPA 2009 Project (AIM)  Guidelines for Harmonization of Montenegrin CP legislation (blueprint for new LCP), http://www.mek.gov.me/ResourceManager/FileDownload.aspx?rid=126923&rT ype=2&file=Guidelines%20for%20Harmonisation%20of%20Montenegrin%20% 20CP%20Legislation.pdf http://www.mek.gov.me/ResourceManager/FileDownload.aspx?rid=126923&rT ype=2&file=Guidelines%20for%20Harmonisation%20of%20Montenegrin%20% 20CP%20Legislation.pdf  Draft new Law on Consumer Protection, fully harmonized with Directive 97/7/EC and ready to be adopted by GoM (Art. 60 – 73 Draft LCP) Chapter 28: CONSUMER AND HEALTH PROTECTION

24. Thank you for your attention. QUESTIONS